NEW DELHI: First the bad news, then the good news. India's slump in the year to March 2013 was even worse than previously estimated but this could actually mean the economy is in recovery mode right now.

Growth in 2012-13 was revised downwards to 4.5 per cent from the 5 per cent estimated in May last year, both numbers still the lowest since 4 per cent growth in 2002-03, data released by India's statistics office showed.

The impact of the latest numbers may be mixed for the United Progressive Alliance government, seeking to restore its popularity ahead of elections, given that it presided over a slowdown that was worse than what it was thought to be. And, while this low-base effect will add to the figure for this year, its effects may be known too late to be of electoral benefit.

"I expect a close to 5 per cent growth rate for the current fiscal," said C Rangarajan, chairman of the prime minister's economic advisory council. He said the 2012-13 growth rate had been lowered due to a sharp downward revision in the secondary sector.

The comprehensive data for 2012-13 showed a decline in domestic savings to 30.1 per cent of GDP, the lowest during the UPA's tenure that began in 2004, as inflation-hit consumers could not set much aside from their income that barely grew in the year.

After adjusting for inflation, or in real terms, per capita income rose only 2.1 per cent in 2012-13, down from 5.1 per cent the year before, indicating the impact of slower growth of people's income and expenditure. In keeping with the lower growth in income, per capita private spending growth slipped to 3.7 per cent in 2012-13 from 7.8 per cent the year before.

Gross capital formation, a measure of investments, rose 5.2 per cent in 2012-13, detailing the government's difficulty in getting stalled investments moving. "The 2012-13 data points towards very weak savings rate and private corporate investment which is consequently leading to a slowdown reflected in the manufacturing sector as 90 per cent of investment in manufacturing comes from the private sector only," said DK Joshi, chief economist at ratings company Crisil.

Private corporate investment in fixed capital has been on the decline since 2010-11 and fell by 3.6 per cent in 2012-13. The growth was driven by public sector investment in fixed capital that grew by 14.1 per cent in the fiscal year. Not everyone shares Rangarajan's optimism on the 2013-14 growth figure. "The data shows that the slowing momentum was much more than previously estimated. Going forward, growth for the current fiscal may get a leg-up but end up at a sub-5 per cent level only," said Shubhada Rao, chief economist, Yes Bank.

"Next fiscal, we may look at a 5.4 per cent growth, which will be based on a stable government in place and normal monsoon," Rao added. The highest revision in 2012-13 numbers was seen in industrial growth, which was cut to 1.2 per cent from 2.3 per cent. Agriculture growth was revised down to 1 per cent from 1.6 per cent. Services growth was at 7 per cent against 7.1 per cent estimated initially.

The revision highlights India's continuing difficulty with obtaining quality data in time, which is badly undermining the ability of policymakers to put correctives in place before things go out of hand. It's also widely expected that once the ASI numbers are out, with a lag of two years, the growth will likely be revised upwards. "The divergence between ASI (annual survey of industries) growth and IIP (index of industrial production) growth in recent years has been resulting in major revisions in the GVA (gross value added) estimates not only from this sector but also from other dependents sector," the statistics office said in a statement.

The statistics office also lowered the fastest growth figure recorded during the UPA years -- the 9.3 per cent expansion in 2010-11 was cut to 8.9 per cent. Growth for 2011-12 was raised to 6.7 per cent from 6.2 per cent, but that was largely the statistical effect of the downward revision in growth the previous year. The share of the primary and secondary sectors shrunk further in 2012-13 to 19.9 per cent and 23.8 per cent, respectively.